All year long there has been one big question looming over America: is the country in recession, and if not, can a full blown recession be avoided? Well, according to The National Bureau of Economic Research, the country most certainly is in the midst of a recession, and has been since December of last year.
There has been a lot of debate as early as the start of the year over whether or not the country had already fallen into a recession. While we had not seen the official definition of a recession confirmed, several respected analysts had claimed the recession was under way months ago.
The officual definition of a recession is when economic growth slows for consecutive quarters. Despite this not having occurred earlier this year, billionaire investor Warren Buffet came out publicly as early as March 3 of this year claiming that America had already dipped into recessionary times.
According to Buffet, the recession was obvious when he looked at the sharp drop in spending he was seeing in his retail companies, as well as the steady (and still going) decline in home values. As it turns out, Buffet was, once again, spot on with his speculation.
The National Bureau of Economic Research, which is responsible for tracking the beginning and end of economic downturns, stated today that the payroll employment measure indicates that we have seen a steady drop since December of last year. So far in 2008, employers have slashed 1.2 million jobs, and the bad news is expected to continue when we get employment data for November this Friday. Analysts are predicting that we are going to see another massive increase in the number of lost jobs, with an additional 325,000.
The market has gotten off to a tough start to the week today, as recession fears have now become a reality, and the questions that remain are just how bad and for how long this recession will linger over us.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.